As we launch into the busiest week of the online retail calendar, known as Cyber Week, it’s a poignant time to reflect on the dreaded R word – returns, writes eCommerce expert, Paul Waddy.
Increased November sales can often give December a bit of a hiding, when returns come in and refunds go out. There are some businesses out there that have return rates in excess of 20 per cent (I’ve seen up to 60 per cent), and generally, it’s businesses that have a range of variants, specifically size options, that get hit the hardest.
Returns though, are a part of life if you’re in eCommerce, and online retailers have got to get returns right; and right means, whatever your policy, act swiftly.
If you open your customer service systems now, there’s a good chance that ‘Where’s my return’ will be sitting in your top two tickets.
How returns impact shopping behaviour
Here are some metrics around how returns can impact consumers’ shopping behaviour, according to a survey conducted by Narvar in 2018, of 1,300 online shoppers.
- 70 per cent said that their last returns experience was ‘easy or very easy’, and 96 per cent would shop again, based on this experience.
- More than two-thirds said that they’re deterred by having to pay for the cost of return shipping, or restocking fees (fees to process the return).
- 57 per cent of respondents said that they exchanged the item that they returned, rather than just taking the refund and not spending it back with the store.
- 59 per cent said that they want communication from the online retailer about the status of their return. (Remember, ‘where is my return’ is likely to be one of your most-asked questions from your customers).
- 54 per cent said they had to print a returns label to make a return.
Check out Paul Waddy’s tips for building consumer trust online:
To refund or not to refund, that is the question
The answer is for online retailers to ask themselves why. What would the desired outcome be, through offering refunds to customers?
Generally, most decisions you make in eCommerce around giving something away for your customers are designed to get them to spend more with you in the near or long-term, or shop more frequently with you. Refunding is no different; you offer to refund customers in order to encourage them to purchase, with the safety of knowing if they don’t like the product, they can send it back and get their money back.
The other behaviour we want to encourage through offering refunds is repeat purchases. In other words, if the return experience is pleasant and the customer can get their money back, they may be inclined to shop again, knowing there was minimal fuss involved with the return.
Regardless of whether you choose to offer refunds, store credits or exchanges, there are things you can do to ensure the process is easy. There are some great apps on the Shopify app store, like Loop Returns, which gives retailers a seamless returns portal to offer their customers; and it plugs right into your store. Or, there are options like the new kid on the block, Refundid, who refund the customer immediately before they’ve even sent the return back, that are proving to be great tools in driving purchase frequency and loyalty.
Of course, the best way to tackle returns is to minimise them from the outset. Here are three things to consider when starting, or tweaking, your online business, which may help to reduce your return rate.
1. Choose your product wisely
Now, this is specifically for the new online retailers or for those who may be considering new products, but in my experience, online stores selling products with size options will often have a higher return rate, whereas online stores selling single-size products generally have a lower return rate.
That’s not to say that selling clothes or shoes isn’t feasible. However, you might consider factoring in a 10-15 per cent return rate into your business model, especially if you plan to refund. If you’re yet to find your product, you might consider sourcing products that don’t have too many size variants.
In addition to choosing products that aren’t too tricky, remember to only use good quality products from trusted suppliers. Selling cheap items at poor quality is a recipe for high returns and unhappy customers.
2. Write great product descriptions and technical specifications
To minimise returns generally, you should have accurate product descriptions. Remember, we aren’t trying to be poetic with product descriptions, we’re trying to tell the customer exactly what our product does, what it looks like, how big it is, how much it weighs.
If you are selling products with size variants, make sure you have a great size chart that includes measurements.
You might consider breaking up your product descriptions into two sections: one section for a description on how your product functions; and another section for the technical specs like weights and dimensions.
3. Ship clearly and on time
Sometimes customers are buying a product for a specific event. In November, there’s a good chance it’s a Christmas present or something for a party or other event, so if their order doesn’t arrive on time, they might not have a need for it and will return it.
So, ensure that you have a clear shipping page that tells customers when they’re going to receive their order. And once you get an order, make sure you pick it and pack it within 24 hours of receiving the order (excluding weekends), and that you’re getting it to the customer in the fastest possible timeframe.
So, whatever your returns policy, make it clear and make it fast – and for those online retailers entering Cyber Week, may your sales be high and your returns low!
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